Bond rally nearing an end?

10-YEAR TREASURY NOTE (^TNX): it is expected that this bond will move toward 4.70 or 47.0 as index soon. it has entered in accumulation phase as indicated in the attached figures.
if the support at 4.7 was broken then we might see major burst toward 3.9 range. The reasons are many but major ones are the oil prices week dollar current Middle East and due to other geopolitical issues.

Best luck

Albrady

Saudi Arabia

please follow this link for charts.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=72080&perpage=6&pagenumber=4
 
لا يفهم هو على الأرجح العربية.


:(
 
mcurto,

What is your take on activity today? The strengthening and break past 107 15 forces me to consider that my short is premature. Any comments on the positioning prior to the 0730 reports tomorrow?
 
Quote from steveosborne:

Short term bonds and long term bonds are different animals -- Landboy is pretty good at explaining why. When the short term drives prices its because the bond market is mainly expressing its view about the current beat of the economy but when long term bonds drive prices, its because the market is focusing on risks and opportunity costs associated with the possession of US treasuries. Risks such as inflation and currency devaluation.

The <b>variation</b> of the risk premium is the difference between how much ZB is moving in relation to ZN and reflects the markets reevaluation of risk associated with inflation and/or exchange rate fluctuations. Since ZB is what I expect to lead bonds in a downpath because of oil, ZB should be the instrument of choice. But ZN will work very well too :-)
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Thanks Steve for the blog, and of course the ongoing analysis...

Ya, the long end sure is expensive, and I completely agree that given the risks of inflation you're not getting much bang for the buck... The market is trying to balance inflation risk with a longer term (2nd half) outlook for the economy, I think the recent geopolitical stuff is just fluff, it won't be enough to sustain a longer rally... Iraq 1, Kosovo, Afghanistan, Iraq 2, all are reasons to get excited but any sustained upmove must be more secular...

I almost feel like buying overnight repos and rolling them, ya no cap gains but I feel they'd be pretty limited at this point...
 
Quote from Il Principe:

PIMCO talking again. This time its Gross saying he expects the 10-year to be 10 BP's lower, and that the short end is the "place to be".
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Ya, hardly a good risk/reward ratio for ten beeps, however, with everybody sooo short...
 
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